Residents react to Kroll report

By Jennifer VigilUNION-TRIBUNE STAFF WRITER

September 10, 2006

Trust issues. It's the kind of thing that rolls off Dr. Phil's lips regularly, but you don't hear it at City Council meetings much.

That changed Wednesday, when the five San Diego council members implicated in a consultants' report on the city's financial meltdown – Council President Scott Peters, Toni Atkins, Donna Frye, Jim Madaffer and Brian Maienschein – heard the T-word come up over and over again from residents at a special meeting.

“You were at the wheel when this crash happened,” said Paul Spiegelman, a local law professor.

Another resident, Clive Richard of the College Area, told the members “perhaps we were mistaken” when electing them, while Linda Colley said talk of the potential for a Peters recall has spread in her University City neighborhood.

Dan Coffey, an avid critic of City Attorney Michael Aguirre, perhaps best summed up the current atmosphere in a city beset by debt, scandal and investigations.

Coffey said he doesn't trust Aguirre – who has little confidence in those around him either, having accused a variety of city officials of lying or conspiring – but is there anyone who can be counted on at City Hall?

“The problem that you face most fundamentally is that nobody trusts anybody anymore,” Coffey said.

That's an issue council members may encounter more and more, especially as they wait to hear whether more people will face charges linked to the creation of the city's $1.4 billion pension debt and the approval of financial disclosures designed to mislead investors.

The damning report, by Kroll Inc., cited multiple failures ranging from negligence on Frye's part to violations of federal and state law by Atkins, Peters, Madaffer and Maienschein.

The findings raised several questions about the five council members' ability to absorb and change in a city that has become known for carefully avoiding tough financial choices, said Cynthia Vicknair, a San Diego political consultant and former City Council aide.

“There is a sense of, 'Well, do they really understand and are they really prepared to do the right thing and do they know how to do the right thing?' ” Vicknair said. “When they come to that fork in the road again, are they going to choose fiscal responsibility or political expediency?”

Before the Wednesday meeting to review Mayor Jerry Sanders' proposals for preventing future wrongdoing, Peters moved to emphasize the council's role in the process, releasing what he called a “100-day plan for reform,” but it included no new steps.

Instead, Peters announced that the council would consider aspects of the mayor's 121-point plan at three meetings, Oct. 16, Nov. 13 and Dec. 4.

He also noted that the council, filled with “neighbors, teachers and preachers,” cannot be expected to be “municipal finance experts,” and that much of what the mayor proposed “builds on the reforms” the city began working on in 2004.

The consultants who found fault with the five council members determined those efforts were not nearly enough and called for 54 other new or revised reforms, on which Sanders based his plan.

Those named in the Kroll report also have more political and financial savvy than Peters suggested.

Peters and Maienschein are attorneys; Atkins and Madaffer were longtime aides to former council members. Another elected official cited by Kroll, former Mayor Dick Murphy, is an Ivy League educated retired judge.

The council, which returned early from a planned four-week hiatus to hear the official debut of Sanders' plan, took the public lashing stoically, though Atkins appeared to choke up at times.

Yet, with the exception of Frye, who said the mayor hadn't explained how the city would find the estimated $45 million to pay for the reforms, they offered little opposition, calling mostly for more discussion, an issue that had been settled when Peters issued the three-meeting timeline.

Whether the council will be marginalized in the two years before Atkins, Madaffer, Maienschein and Peters leave because of term limits is open to interpretation.

Sanders already is a popular mayor with increased powers under the voter-approved city government transition that took place Jan. 1. He also won office long after the period, 1996 to 2003, that is being examined by investigators.

Peters followed Sanders' lead last week regarding the Securities and Exchange Commission's San Diego investigation. At a Wednesday news conference, he acknowledged that he had seen a draft of the agency's consent decree for San Diego, though he declined to offer details.

Sanders, at Peters' side, refused to confirm the existence of the document, saying that the city had agreed to keep the SEC negotiations under wraps.

By Thursday, Peters had changed his approach, answering further questions about the consent decree by saying only that he thought the mayor had “given the appropriate response.”

Norma Damashek, a vice president with the local League of Women Voters, called Peters “passive,” and said stretching talks on the mayor's reforms through December puts off what she sees as the more pressing business of how to plug the city's financial holes.

The costs of meeting long-delayed obligations, from filling the pension system's yawning gap to rebuilding decaying sewer and water systems, could total $4 billion.

“They're going to take a relatively minor issue and take the rest of the year to resolve it so that they don't have to touch the elephant that is sitting on top of them – the pension debt, the infrastructure debt, the lawsuits that are hanging over us,” Damashek said.

Lobbyist Richard Ledford credited Peters for his “very rational, very methodical” approach to navigating the city's financial and legal thicket.

Simply adopting the mayor's reforms would have been the smarter political move for council members, Ledford said. But their willingness to linger over Sanders' plan is a sign of their embrace of the new executive and legislative structure at City Hall, which gives them the authority to review his policy proposals.

“I think you saw some of the tension between the two levels of government and it was strong enough to overcome (the urge for) political preservation,” Ledford said.

Ledford, once chief of staff to former Mayor Susan Golding, said he doubts that the council members singled out by Kroll will be forced from their jobs, so they will be have to be part of the reform effort, despite the public criticism.

“Sometimes you have to ride the horses you're saddled with,” he said.

Colley, the University City resident who told the council she had “a real trust issue problem” with them, said later that she is not ready to set aside her doubts.

“I realize these people are in a difficult position, but sometimes you have to stand up, take responsibility, take your punches from citizens, then they're going to forgive and move on,” she said. “Until that happens, I'm definitely not ready to move on.”